How Does Green Finance Reform Affect Enterprise Green Technology Innovation? Evidence from China

The construction of pilot zones for green finance reform and innovations (GFRI) is an important initiative for the Chinese government to develop a green economy. Based on 3236 A-share listed enterprises from 2011 to 2018, this paper uses the difference-in-differences method (DID) to examine whether GFRI can promote enterprise green technology innovation. The results show that GFRI can significantly enhance enterprise green technology innovation. This conclusion is still robust after the parallel trend test, PSM-DID and placebo inspection. The mechanism research shows that GFRI can relocate the internal and external financing constraints, and then promote enterprise green technology innovation. Further, heterogeneity analysis shows that GFRI’s green technological innovation incentives only exist in the eastern region and non-state-owned enterprises, which not only significantly improves the total green technology patents, but also significantly improves the green invention patents and green practical patents. For the central and western regions and state-owned enterprises, GFRI can only enhance the green invention patents. From the perspective of enterprise green technology innovation, this paper assesses the implementation effect of GFRI, providing theoretical support and empirical evidence for green finance policies to serve China’s green economy